Lahey Health leader says community care costs less

Ethan Forman/Staff photoFeb. 1, 2017DANVERS — Lahey Health President and CEO Dr. Howard Grant, left, speaks about rising health care costs to the North Shore Chamber of Commerce, during a breakfast meeting at the DoubleTree by Hilton Hotel. Chamber Chairman Russell Cole is seated next to Grant.

DANVERS — Amid talk of soaring Bay State health care costs and uncertainty about the Affordable Care Act, the head of Lahey Health told North Shore business leaders that people need to consider their community hospitals before heading to Boston for care.

Lahey Health President and CEO Dr. Howard Grant spoke to a packed ballroom of business leaders Wednesday morning at the North Shore Chamber of Commerce’s Health Care Breakfast at the DoubleTree by Hilton Hotel. 

Grant noted that health care costs are the No. 1 concern of business leaders, in a state that he said has one of the finest health care systems around — and one of the most expensive.

The Lahey CEO also addressed Monday’s announcement that the boards of Lahey and Beth Israel Deaconess Medical Center have signed a letter of intent to explore combining the two health care systems. While Grant did not give specifics, he gave a general timeline for the merger.

“It’s something that we are really excited about,” he said. “It’s not something that will happen overnight. We will go through a considerable amount of due diligence over the next three or four months, and then there will be a long regulatory process for another year or so after that.”

Grant said both organizations were committed to what he called a “high value model. We believe there is an opportunity to sustain the quality of care that exists in Massachusetts today without compromising quality and lowering your costs over time. I think we are capable of doing that.”

The process will require state and federal approvals.

Lahey Health represents the 2012 merger of Northeast Health System and Lahey Clinic Foundation. On the North Shore, this includes Beverly Hospital, Lahey Medical Center in Peabody, Addison Gilbert Hospital in Gloucester and Lahey Outpatient Center in Danvers.

Health care costs ‘unsustainable’

Calling the cost of health care in Massachusetts “unsustainable,” Grant said the cost is 36 percent higher here than the national average. A large part of the problem is that people prefer to go to higher cost teaching hospitals in Boston, making it harder to sustain community hospitals. 

About 40 percent of Medicare discharges happen at downtown academic medical centers in Massachusetts, Grant said, compared with a 16-percent national average. A procedure in Boston can cost double or triple what it would cost at a community hospital.

“As community hospitals disappear in the community setting, the overall cost of care goes up, because when routine care is delivered in higher cost settings, it ends up affecting everyone’s premiums,” Grant said.

He noted the “great care” provided by Anna Jaques Hospital in Newburyport, an independent hospital which is affiliated with Beth Israel Deaconess Medical Center.

Grant recalled his first meeting when he came to Lahey at Gloucester City Hall. At the time, Lahey was in merger talks with Northeast Health. He quickly learned that residents wanted Addison Gilbert to stay open.

“I walked into the building and they were hanging me in effigy from the rafters, and I hadn’t even met anybody there yet,” Grant said. “You all feel pretty strongly about keeping a community hospital in Gloucester, don’t you.”

Lahey and Northeast made a commitment to keep the hospital open, Grant added.

“But, you had to use it. We couldn’t keep it open if you didn’t use it. When somebody chooses to go to a higher cost setting, everybody pays for it when it’s not necessary.”

Obamacare talk

Before Grant spoke, members of the chamber’s health care task force, Salem attorney Bill Tinti and chamber Director Darren Ambler of the human resources consulting company Insight Performance of Dedham and Danvers, gave an update on what could replace the Affordable Care Act.

“Repeal would be very difficult without a replacement because it would cause a lot of turmoil,” said Ambler, an insurance expert.

“Thank you for sparing me the responsibility for trying to describe what’s going on in Washington,” Grant said. “Because, frankly, we come to work every day and don’t have a clue with what we are going to be confronted with.”

“All I have heard out of Washington recently,” Grant said, “is they want everybody to have insurance, that there is going to be no mandates, that the costs are going to be a lot lower, and people are going to be able to go wherever the hell they want to go,” he said to some laughs. 

That, he said, would be unsustainable.

“I personally am gravely concerned for the changes that will happen. If ACA went away today, 20 million Americans would lose their insurance, and still today, there are 25 million people who go to sleep without health insurance. I personally think we can do better as a society than that,” Grant said to applause.

Staff writer Ethan Forman can be reached at 978-338-2673, by email at eforman@salemnews.com or on Twitter at @DanverSalemNews.

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